Comments on: Refinancing with a Second Mortgage? Patience, my Friend, patience.

By: Rhonda Porter

Rhonda Porter — Sat, 02 Jan 2010 02:18:59 +0000

It’s really tough with second mortgages…and when it’s a HELOC, the lender looks at the entire credit line (even if you’re not using it since it’s available for your use).

By: RoseKaye

RoseKaye — Fri, 01 Jan 2010 16:05:53 +0000

So here is my situtation with National City as my heloc holder.
We are looking at doing a straight refi- no cash out. Rate reduction of over 1.5 and pmt reduction on the first of about 200. Apprasial came back at 169,000. Refi of first at 112,000. and open heloc of 25k with a 0 balance. Asked National City for a subornation and they said they would only if we reduced the heloc to 7k. We have excellent credit and have great remaining income. Even if we did a cltv at 80% we are looking at the heloc being at 23200. We want to keep the heloc open because we are planning on buying a truck or doing some home improvements. The only time we have had a balance on the heloc in the last 3 years was when we did new windows and we paid it off in 8 months. I wish with the new guidelines for the hamp and all the other things that are going on, that second mtgs would be required to subornate if it was in the best interest of the customer. I am not doing anything the change their position then before the refi, but now they want all kinds of stipulations. This Sucks.

By: stobin

stobin — Fri, 18 Dec 2009 06:00:26 +0000

I just survived my Chase subordination experience, so my Wells 3-step refi on my first is finally going through, pushed a month from the original close date. the wait for the HELOC subordination was just under 30 days. I did have to sign a form Chase drafted up “requesting” that Chase lower my HELOC balance before they would process the subordination. My ~$50k HELOC is nearly maxed out. Fortunately, they only made me request a reduction of about $2k, which is about exactly how much I had open on the HELOC, although they claim the reduction was to get the CLTV where it needed to be. in any case, I was happy to do it, since my fear was that they were going to force me to pay the balance down significantly, which would have likely blown the deal for me. As a self employed person, i’m thrilled to finally pull off a refi — my monthly is dropping by over $500 and in hindsight, aside from faxing a few things, neither WF nor Chase made me jump through hoops or really “do” much of anything…except wait. That’s the hardest part.

By: Maria

Maria — Thu, 10 Dec 2009 16:33:44 +0000

ok thanks Rhonda again for your help!!! p.s. do you think my rate-term refi would be lower then my current rate now though ? my rate is 5.1 the rate for the cash out was between 5 and 5.25 …im not sure if it can go any lower…

By: Rhonda Porter

Rhonda Porter — Thu, 10 Dec 2009 16:30:10 +0000

That’s probably the issue with the subordination, Maria. I would see what type of rate you would qualify for with a rate-term refinance. It may be lower than the cash out/debt consolidation refi you’re looking at. You can apply the savings towards paying off your debts each month.

Second lien holders are not likely to approve subordinations with debt consolidations (i.e. cash out) refinances…their fear is that the equity is being withdrawn from the property prior to a foreclosure and they may viewing the nature of the refinance (debt consolidation) as a riskier transaction vs a rate-term refinance.

Good luck!

By: Maria

Maria — Thu, 10 Dec 2009 16:23:26 +0000

what i was trying to do was debt consolidation, so the broker finally got a lender to approve my loan, meaning i would refi my 1st mortgage and pay ALMOST all of the credit card companies, i was not able to pay every single one of them off because they wouldnt approve me for that dollar high of an amount, and i also was NOT paying off my 2nd mortgage (Heloc). So basically we were ready to go, everything was approved…and then the heloc lender said nope, not giving you this letter. so. thats basically it. thank you again for your insight and kindness. things eventually work out in the end right? i can only hope they will….

By: Rhonda Porter

Rhonda Porter — Thu, 10 Dec 2009 16:17:52 +0000

Maria, a rate-term refinance means that you’re not getting cash back (or minimal cash back). Subordinating mortgages has everything to do with foreclosure and who’s going to get paid back which is why second mortgage lien holders are scrutinizing whether or not they’ll provide a subordination and under what terms.

A rate term refi may offer you a better rate than a “cash out” refi. Are you getting cash out or paying off a second mortgage that was obtained after you purchased your home?

Mortgage originators can speak to underwriters. It may depend on the structure. Mortgage brokers are detached from the underwriter since the underwriter is at a entirely different company–however that doesn’t mean that they cannot contact the underwriter directly or indirectly through the wholesale lender rep (sales person for the mortgage company the loan is being brokered to).

Mortgage originators at banks and correspondent lenders may or may not be able to talk to underwriters even though they typically work within the same company depending on company policies and where the underwriters are located. For example, a bank may have a regional processing center located miles away or located in another State…because of the volumes they handle, they may not want LO’s to contact an underwriter directly. I would imagine that there would be some system where they could talk to a manager or where the processor could have more access to the underwriter.

I work for a correspondent lender and my underwriters sit about 10 feet or less from where my desk is. However, I do my best to stay out of their way and let them do their jobs so they can stay focused on the file that’s in front of them. However, if I have a situation that requires attention that my processor and I cannot resolve, I will go to our management to review it to see what our options are.

Underwriters typically do not speak to the borrowers–they are “behind the scene”. In fact, it’s rare that my processor talks to the my clients–for the same reason that underwriters don’t–they need to stay focused on the transaction in front of them.

I think it’s the mortgage originators job to communicate with the borrower–that’s what they’re being paid for.

By: Maria

Maria — Thu, 10 Dec 2009 15:42:48 +0000

Rhonda, I copied below the reason they denied my loan, & they suggested a rate and refi option, i have no idea what that is, but my rate now is 5.1% so im not sure how much lower it would go. saving $120 or so a month truly doesnt help much. I owe $48,000 on my Heloc of $50,000. Otherwise I would tell them to reduce it but I guess they are afraid I wont be able to pay them back. By them giving me the sub O letter, and by me doing this refi really puts me in a better position but i guess im too much of a risk. my debt to income ratio stinks.

Reason from underwriters:
“They would do it behind a rate and term refi b/c they are already in 2nd place to that current loan amount.

If they go in front of a larger loan amount they would be less equity in the property and less likley they would get paid if there was a foreclosure”

p.s. do the underwriters ever speak to the brokers? im being told they never speak to the public. thanks a million for your help!

By: Rhonda Porter

Rhonda Porter — Thu, 10 Dec 2009 00:30:28 +0000

Maria, did they give a reason for the denial? I’m working on a subordination right now and they’re making my client reduce their the available credit on their HELOC.

By: Maria

Maria — Wed, 09 Dec 2009 21:20:48 +0000

wow sounds like most of you at least got your sub O signed. I just found out I was denied. Yep. After 3.5 months of agonizing waiting, and after spending $725 attempting to refinance. ($300 for appraisal, $300 for Title search, $125 for 2nd lender to provide the Sub o Letter, which they denied so wheres the letter, no letter, wow what a way to make money!!!!) isnt that nice as if im not in deep enough. where do i go from here?? church? thats about the best chance i have now, lots of prayer…im scared…